Gold futures continued to rally on Monday and hit the 61.8% Fibonacci retracement of the previous down trend at Rs 48,200. Now the next key resistance exists around Rs 48,500, which is the previous swing high of the channel. Therefore, the price has to sustain above Rs 48,500 to resume its rally and move towards the next target resistance at Rs 49,000. The key support exists around Rs 47,700 (8-DEMA), followed by Rs 47,380 (200-DEMA). The bullish crossover of EMAs (8 and 20), along with trend channel breakout has fueled the bullish rally in the metal. Moreover, strength in the RSI, which is hovering near 70, has kept the bullish hopes intact. All the above technical factors supports a higher bias in price. So any dip towards the support might attract buying and push the price towards Rs 48,500.
Trading Strategy: Buy MCX Gold Dec at Rs 47,950. Target: Rs 48,500. Stop loss: Rs 47,700
MCX Silver rallied significantly during the course of the week, after breaching the key resistance of Rs 65,800 on Friday. Now Rs 66,500 is the next resistance. If the bulls succeed in closing it above Rs 66,500, then it might move towards the 61.8% Fibonacci retracement of the previous downtrend at Rs 68,160. Meanwhile, the key support holds around Rs 65,000 (200-DEMA), which could limit the downside. On the oscillator front, fast stochastic is hovering in the overbought zone, which could bring profit taking at higher levels. However strong RSI, which is at 77, is supporting the bull’s case. From the above analysis, we expect the price to trade in the range of Rs 65,000-67,000 with a sideways bias. A closing below Rs 65,000 would negate the bullish momentum and weaken the price towards Rs 63,800.
Trading Range: Rs 65,000-Rs 67,000
(Ravindra Rao is CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)
Tapan Patel
Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded weak on Tuesday with spot gold prices at COMEX marginally down near $1,803 per ounce. Spot silver prices at COMEX fell by 0.65% near $24.40 per ounce in morning trade. Bullion prices traded under pressure on Tuesday on stronger dollar and rise in US bond yields. The dollar index rose after China shifted its policy towards growth while investors are awaiting outcome from Bank of Japan and ECB policy meetings. Bullion prices may trade sideways to down for the day.
Trading Strategy: MCX Gold December resistance for the day lies at Rs 48,500 per 10 gram with support at Rs 47,900 per 10 gram. MCX Silver December support lies at Rs 63,800 per kg, resistance at Rs 67,800 per kg.
Outlook: Crude Oil
Crude oil prices traded firm on Tuesday with benchmark NYMEX WTI crude oil prices near $83.81 per barrel in morning trade. Crude oil prices traded near a seven-year high on supply tightness and higher demand outlook. Crude oil prices rose with a rally in natural gas prices resulting in fuel-switching for power. The higher demand ahead of winter may boost crude oil prices in the near term. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy: MCX Crude Oil November support lies at Rs 6,240 per barrel with resistance at Rs 6,380 per barrel.
Outlook: Base Metals
Base metals prices traded mixed on Tuesday. Most of the metals kept steady trading range in morning trade. Base metals capped upside on stronger dollar amid China policy shift. Base metals got boost with rise in gas and coal prices on Monday while supply concerns from Peru supported copper prices to trade firm. Aluminum prices fell to a three-week low while nickel prices may keep firm trading on higher demand outlook. The Chinese government has ensured to ease a power shortage in the coming months. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper November support lies at Rs 765 and resistance at Rs 778. MCX Zinc November support lies at Rs 280 and resistance at Rs 290. MCX Aluminium November support lies at Rs 229 with resistance at Rs 235.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)
